Case Studies of 6 Famous Corporate Espionage

Ashwini Ashwini Shubham Kumar Shubham Kumar
Apr 18, 2022 5 min read
Case Studies of 6 Famous Corporate Espionage

In every business school, you will learn that the primary objective of a business is to make money. However, no one signifies the right method to make a profit. Well, in greed to make more money, some people start to follow unethical ways. There can be thousands of unethical ways, one such way is to steal a competitor’s plan or idea and present it to the world, as their own. There are numerous big and small corporate houses present in history, that had stolen their competitor’s ideas. Due to this malpractice by the corporate houses, the term espionage evolved. If you are wondering, what exactly ‘corporate espionage’ means, then let’s get familiar with the term first.

The dictionary meaning of corporate espionage, “Attempting to obtain trade secrets by dishonest means, as by telephone- or computer-tapping, infiltration of a competitor’s workforce, etc.

In the layman's language, we can say that corporate espionage means spying on your competitor to gather their secret business information. There can be different means to spy, like tapping phone calls or hacking computer systems or even bribing their past and current employees to get competitor’s future roadmap. This practice is done by almost every corporate establishment, the only difference is that some got caught in time and some just don't, instead they become rich on another person’s idea. So, today we are going to focus on the former one and will talk about corporate espionage by 6 top companies.

Unilever Vs Procter & Gamble
Cadence Design Systems Vs Avant
Opel Vs Volkswagen
IBM Vs Hitachi
Avery Dennison Corp Vs Pin Yen Yang (Four Pillars)
Waymo Vs Uber

Unilever Vs Procter & Gamble

In 2001, P&G admitted that they launched a spy mission for their core competitor Unilever to gather some inside scoop. Their cunning corporate espionage plan, which P&G referred to as an “unfortunate incident,” included going through Unilever’s trash in search of documents, although if Unilever habitually throws away full documents entitled “Super Secret Product Information That Will Crush P&G” their days as an industry leader are numbered. Later when the matters were disclosed in front of Unilever, then both the companies came to a mutual understanding and P&G swore not to use any gathered information. Thus the matter was mutually solved by both companies.

Cadence Design Systems Vs Avant

In the early 90′s the Avant, one of the biggest software companies in silicon valley at that time, had stolen code from a rival company, Cadence Design Systems. This became more than a simple case of unscrupulous business practices when prosecutors filed charges and, in 2001, Avant! was ordered to pay $182 million in restitution plus interest and fees, for a total of $200 million. The case got very hick at the time and Avant paid $200 million to settle the case and received the civil case in return. This marked a record for corporate espionage cases during that decade.

Opel Vs Volkswagen

Every employee is precious to the company and Opel faced the biggest shock of the time when their chief of production moved to rival Volkswagen and was followed by not one, not two, but seven other executives. The executives didn’t go alone but also took away all confidential documents along with them. Imagine the condition of the Opel. Opel fought a long legal battle with Volkswagen but in the end, Volkswagen agreed to pay General Motors, the parent company of Opel, $100 million and place an order for over $1 billion’s worth of car parts. Volkswagen still refused to apologize, though, showing that even multinational car companies can be as stubborn as 5-year-old children and can undertake corporate espionage dishonestly.

IBM Vs Hitachi

It’s a bit old case of corporate espionage, but the importance of the case in the computer world is enormous. In 1981, Hitachi mysteriously came into possession of an almost full set of IBM’s Adirondack Workbooks. As a matter of fact, the document contained IBM design documents full of IBM technical secrets and was prominently marked FOR INTERNAL IBM USE ONLY didn’t prompt Hitachi to return them. The technical staff of the IBM and FBI went through nail cracking investigation to find the culprit. After the arrest of numerous IBM officers, the culprits got caught and Hitachi settled out of court and paid $300 million to IBM.

Avery Dennison Corp Vs Pin Yen Yang (Four Pillars)

Pin Yen Yang, President of Four Pillars, a Taiwanese company that makes and sells pressure-sensitive products, and his daughter Hwei Chen Yang, were arrested and charged with a smorgasbord of offences related to industrial espionage against Avery Dennison Corp, a major US adhesives company. They were arrested for paying $1,50,000 to one of the Avery Dennison employees and which caused a loss of $10,000. That was indeed sticky.

Waymo Vs Uber

Waymo filed a complaint against self-driving truck startup Otto and its parent company Uber for patent infringement and stealing trade secrets. Anthony Levandowski was an employee at Waymo and Waymo accused Levandowski of using a flash drive to steal 14,000 files (designs, blueprints, and testing documentation) containing highly confidential information before his resignation. Otto was founded by  Levandowski. Otto and Uber are using key parts of Waymo's self-driving technology, specifically related to its light detection and ranging radar.

Conclusion

The business is indeed a dirty game or we can say some selfish people made it dirty. Some people have a viewpoint that with the copyright act and other security tools, corporate espionage has been reduced but no one can be sure of it. All these corporate espionage tales are to alert all aspiring entrepreneurs so that they know the depth of the upcoming danger. It is better to practice healthy and fair business activities, as there is plenty of room for all of us in this corporate world.

FAQs

Is corporate espionage illegal?

Corporate Espionage is an illegal as well as an unethical practice.

What is Corporate Espionage?

Corporate Espionage is gathering secret information about the different companies by dishonest means.

What are the types of Corporate espionage?

There are different types of corporate espionage and they are:

  • IP Theft
  • Property Trespass
  • Hiring away employees
  • Cyber Attacks and Hacking
  • Wiretapping

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